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Canada's unemployment numbers hit record high in May

Statistics Canada highlights "unprecedented shock to the Canadian labour market"

Canada’s May unemployment rate was 13.7%, the highest recorded since comparable data became available in 1976, Statistics Canada said in numbers released June 5.

In February, prior to the COVID-19 economic shutdown, the unemployment rate was 5.6%, increasing to 7.8% in March and 13.0% in April,

Canada’s labour market began a rebound in May as some 290,000 workers of an estimated three million who lost their jobs due to the COVID-19 pandemic gained work.

The crisis also resulted in increases in absences from work of 2.5 million people, Statistics Canada said

“Employment in British Columbia increased by 43,000 in May and the unemployment rate rose 1.9 percentage points to 13.4%, as more people looked for work,” the agency said.

Almost all B.C. employment increases were in the services-producing sector (up 41,000), led by accommodation and food services (up 12,000), educational services (up 12,000), and wholesale and retail trade (up12,000).

B.C. Finance Minister Carole James is expected to comment on the numbers Friday morning.

The national statistical agency’s May labour force survey said travel restrictions, business closures and physical distancing measures were part of an intentional economy shutdown resulting “in an unprecedented shock to the Canadian labour market, including employment losses.”

The survey, covering 40,000 households May 10-16, said restrictions have begun to ease in British Columbia, Saskatchewan, Manitoba, Quebec and the Atlantic provinces with the exception of Nova Scotia while shutdowns largely remained in Alberta, Ontario and Nova Scotia as of mid-May.

The survey found that, in May, employment rose 1.8%, while the number of people who worked less than half their usual hours dropped by 292,000 or 8.6%.

“Combined, these changes in the labour market represented a recovery of 10.6% of the COVID-19-related employment losses and absences recorded in the previous two months,” the agency said.

Three-quarters of gains from April to May were in full-time work (up 219,000 or 1.6%).

However, compared with February, full-time employment was down 11.1% in May, while part-time work was down 27.6%.

For the self-employed, numbers held steady after a February to April decline of 79,000 or 2.7%.

 In May, 42.9% of self-employed workers worked less than half their usual hours for COVID-19-related reasons, a drop from 50.2% in April.

“Self-employed people who were away from work continued to be relatively harder hit financially than employees. Self-employed people who lost hours continued to be less likely to be paid than employees in the same situation,” Statistics Canada said.

With restrictions easing, the survey found people beginning to return to their places of work. The survey found some 8 million Canadians who worked at least half of their usual hours worked at a location other than home. That number increased from 7.2 million in April.

But, the number of people working at least half their usual hours and doing so from home was little changed at 4.9 million.

The survey also noted increases in employment and hours in industries where occupation-related requirements make it necessary to be in close physical contact with others rose. Those include accommodation and food services, and wholesale and retail trade, the two industries where March and April employment losses were greatest.

The survey said unlike previous economic downturns, the impact of the COVID-19 economic shutdown was felt first in the services-producing sector and spread to goods-producing industries including construction and manufacturing by the last week of March. The April survey showed the spread into the goods-producing sector.

In May, employment rebounded more strongly in in the goods-producing sector (up 5.0% or 165,000 jobs) than in the services-producing sector ( up 1.0% or 125,000 jobs).

The survey reported that, in May, total hours worked across all industries grew by 6.3%, compared with an increase of 1.8% in employment. That increase followed a cumulative decline of 27.7% from February to April.

Total hours worked rose in most industries, led by construction (up 19.0%); other services (up 13.2%); wholesale and retail trade (up 11.0%); manufacturing (up 10.9%); educational services (up 9.4%) and natural resources (up 9.2%).

The accommodation and food services industry experienced a greater drop in employment from February to April than any other industry.

In May, the increase in total hours worked (up 2.4%) was less than the growth in employment (up 6.8%). The survey suggests that may be an indication that employers' initial adaptation to the easing of COVID-19 restrictions involved re-hiring former employees or finding new workers.

Total employment increased more than twice as fast among men (up 2.4% or 206,000) than women (up1.1% or 84,000) in May, resulting in a greater proportion of the employment losses experienced in March and April being recovered among men (14.0%) compared with women (5.4%).

That quicker pace of  May employment growth among men can be seen across the three major age groups. The most notable difference was for those aged 55 and older, where employment increased by 4.2% (up 85,000) among men, while it was little changed among women.

The survey said pandemic labour market impacts have been especially severe for youth and students. While employment among youth15 to 24 increased by 30,000 (up 1.8%) in May, it only slightly reduced cumulative employment losses (down 843,000 or -33.0%) experienced February to May.

A crowdsourcing data collection on the impacts of the COVID-19 pandemic, carried out by Statistics Canada from April 19 to May 1, showed post-secondary students were experiencing the cancellation of summer jobs and considerable uncertainty about the future.

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